Petrus Resources Ltd. announces financial results for the first quarter of 2013, an increase to its credit facility and provides activity and operational update
04 Jun, 2013, 08:00 ET
CALGARY, June 4, 2013 /CNW/ - Petrus Resources Ltd. ("Petrus" or the "Company") is pleased to present highlights of its operating and financial results for the three months ended March 31, 2013. The Company's financial statements, including the 2012 Annual Report, can be accessed at www.petrusresources.com.
FIRST QUARTER 2013 FINANCIAL HIGHLIGHTS
- First quarter sales averaged 3,007 boe/d (57% natural gas) up from 1,176 boe/d (91% natural gas) in the first quarter of 2012. The increased production volume and oil weighting is attributed to successful light oil drilling and the oil weighted asset acquisition which closed in June 2012.
- With the increased oil weighting, the first quarter operating netback doubled to $21.43/boe from $10.77/boe in the comparable prior year period. The oil and liquids weighting continues to increase as a result of successful drilling operations.
- Sales apportionments during the first quarter of 2013 resulted in higher oil inventories at the end of Q1. Petrus negotiated a rail sales option for a portion of its Rycroft oil volumes subsequent to quarter end. The excess inventory was sold via rail which will contribute to Petrus' second quarter cash flow.
- Funds from operations for the first quarter of 2013 increased over fivefold to $5.6 million from $0.9 million in the first quarter of 2012. Funds from operations on a per share basis doubled over the same period from $0.03 per share to $0.06 per share.
|Three months ended|
|(000s) except per boe amounts||Mar. 31, 2013||Dec. 31, 2012||Sept. 30, 2012||June 30, 2012||Mar. 31, 2012|
|Natural gas (mcf/d)||10,315||9,128||9,189||5,219||6,425|
|Natural gas production weighting||57%||56%||60%||85%||91%|
|Realized Sales Prices|
|Natural gas ($/mcf)||3.29||3.49||2.38||1.92||2.22|
|Hedging gain (loss) ($/boe)||(1.21)||(0.56)||1.14||2.59||1.80|
|Effective price ($/boe)||42.94||44.63||41.90||23.46||22.18|
|Royalty exp (recovery) ($/boe)||8.31||7.22||6.88||(5.85)||4.90|
|Operating expense ($/boe)||11.38||7.94||13.69||13.51||5.66|
|Transportation expense ($/boe)||1.82||1.10||1.28||1.50||0.85|
|Operating netback ($/boe)||21.43||28.37||20.05||14.30||10.77|
|FINANCIAL ($000s except per share)|
|Oil and natural gas revenue||12,096||11,468||9,742||2,011||2,253|
|Funds from operations(1)||5,566||6,268||4,502||505||890|
|Funds from operations per share(1)||0.06||0.07||0.05||0.02||0.03|
|Weighted average shares (000s)||86,276||86,276||86,124||32,174||32,033|
|As at quarter end ($000s)|
|Working capital (deficit)||(10,551)||2,793||17,285||21,652||(2,241)|
(1) Please see the Reader Advisories at the end of this news release for a discussion with respect to funds from operations.
Petrus is currently focused on light oil drilling in each of its core operating areas, and is poised to take advantage of improved natural gas prices given its diversified inventory of natural gas and light oil drilling locations.
Foothills - Brown Creek
In Q4 2012 and the first quarter of 2013, Petrus initiated drilling of two net operated Cardium horizontal wells targeting light oil in Brown Creek. The first well produced light oil on a three month test at a stable unstimulated rate of approximately 30 bbl/day. The company is currently preparing the well for a multi-stage frac stimulation to enhance inflow. The second well tested liquids-rich natural gas at a rate of 4 mmcf/d. Tie-in of this well is underway and is expected to be complete in June. It is expected to come on-stream at a restricted rate of 1.5 mmcf/d due to downstream facility constraints. These wells confirm our confidence in the Brown Creek structure where Petrus has access to a number of additional drilling locations.
Foothills - Cordel
Petrus participated in the drilling of two Cardium horizontal wells in the fourth quarter of 2012 with an average working interest of 20%. The wells came on stream in the first quarter of 2013 with combined light oil production of 360 bbl/d (net). The associated natural gas was tied-in in the second quarter of 2013 adding a further 158 boe/d net.
Petrus has participated in three (1.0 net) additional Cardium horizontal wells to date in 2013. The first well is currently undergoing a multi-stage frac operation. The next two wells were drilled from a multi-well pad where Petrus has a 33.33% working interest. One well was completed and tested at an average rate of 950 bbl/d (313 bbl/d net) of oil and approximately 480 mcf/d (158 mcf/d net) of associated natural gas and the next well was tested and free-flowed at an average rate of 750 bbl/d (280 bbl/d net) of oil, with 600 mcf/d (198 mcf/d net) of associated natural gas. This production will be brought onstream once drilling operations on the pad are complete. One offsetting location is currently being drilled and a fourth is expected.
Foothills - Cabin Creek
Together with an industry partner on a 50/50 basis, Petrus has recently entered into a farm-in in the Cabin Creek area of the Alberta Foothills. The prospect is targeting oil in the Cardium with the first horizontal well earning the farmor's 100% working interest in a 6 section block subject to a non-convertible overriding royalty. The agreement provides for a rolling option which would allow Petrus and its partner to drill additional wells to earn farmor's interest in an additional 18 sections of land, also subject to a non-convertible overriding royalty. The first earning well is currently being drilled.
In the fourth quarter of 2012, Petrus drilled four net Montney oil wells in the Peace River area. Oil and/or natural gas was successfully tested in each of the wells. Upon completion of the nine total Peace River wells drilled, Petrus released its drilling rig as planned and the 2013 capital program was refined based on evaluation of the drilling results. In 2013, Petrus intends to drill 7 to 9 Montney wells targeting light oil. Petrus also plans to construct two water disposal facilities to reduce trucking and disposal fees and optimize operating netbacks.
As a result of its annual review, the Company's credit facility has been expanded from $40 million to $60 million. The $60 million credit facility will consist of a $55 million revolving credit facility and a $5 million development line. The increased access to capital provides Petrus with ample financial flexibility to execute its capital expenditure program and pursue additional opportunities which may become available.
Petrus is a private Canadian oil and gas company focused on property exploitation, strategic acquisitions and risk-managed exploration in Alberta. Petrus is a return-driven company that is focused on delivering per share growth.
This press release contains forward-looking statements. More particularly, this press release contains statements concerning Petrus' commodity weighting, plans related to drilling and other operations, commodity focus, commodity pricing, drilling locations, production rates, the expected ability of Petrus to execute on its exploration and development program and Petrus' anticipated production (both in terms of quantity and raw attributes) cash flow, operating netbacks, planned operations and the timing thereof, evaluation of completed operations, capital budget and capital expenditure program, the availability of opportunities and other similar matters. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Petrus, including: (i) with respect to capital expenditures, generally, and at particular locations, the availability of adequate and secure sources of funding for Petrus' proposed capital expenditure program and the availability of appropriate opportunities to deploy capital; (ii) with respect to drilling plans, the availability of drilling rigs, expectations and assumptions concerning the success of future drilling and development activities and prevailing commodity prices; (iii) with respect to Petrus' ability to execute on its exploration and development program, the performance of Petrus' personnel, the availability of capital and prevailing commodity prices; and (iv) with respect to anticipated production, the ability to drill and operate wells on an economic basis, the performance of new and existing wells and accounting risks typically associated with oil and gas exploration and production; (v) oil and gas prices; (vi) currency exchange rates; (vii) royalty rates; (viii) operating costs; (ix) transportation costs; and * the availability of opportunities to deploy capital effectively. Although Petrus believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Petrus can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures). Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties.
The forward-looking statements contained in this document are made as of the date hereof and Petrus undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.
Any references in this news release to initial, early and/or test or production/performance rates or data related thereto are useful in confirming the presence of hydrocarbons, however, such rates or data are not determinative of the rates at which such wells will continue production and decline thereafter. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for the Company. Such rates may be estimated based on other third party estimates or limited data available at this time. In all cases in this press release such rates not necessarily indicative of long-term performance of the relevant well or fields or of ultimate recovery of hydrocarbons.
The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one boe (6 mcf/bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in this report are derived from converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. The forward-looking statements contained in this document are made as of the date hereof and Petrus undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
"Funds from operations" should not be considered an alternative to, or more meaningful than, cash flow from operating activities as determined in accordance with International Financial Reporting Standards as an indicator of Petrus' performance. "Funds from operations" represents cash flow from operating activities prior to changes in non-cash working capital, transaction costs and decommissioning provision expenditures incurred. Petrus also presents funds from operations per share whereby per share amounts are calculated using weighted average shares outstanding consistent with the calculation of earnings per share.
SOURCE: Petrus Resources Ltd.
For further information:
Kevin Adair, P.Eng.
President and CEO
E: [email protected]
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